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17 Aug, 2023 22:04

Trump issues warning on dollar

The Republican frontrunner lamented decline of the US currency, arguing no country would have dropped the greenback on his watch
Trump issues warning on dollar

Former US President Donald Trump warned that the dollar is poised to lose its status as world reserve currency – and with it the country's position atop the geopolitical totem pole – in an interview with Fox Business on Thursday. 

Our country is going to hell and we’re not going to be the big boy,” Trump claimed, arguing that “We have power, but it’s waning. In fact, it’s waning in terms of our currency.” 

Should the dollar cease to be the world’s reserve currency, “it’s bigger than losing any war,” the Republican frontrunner continued. While this would have been “unthinkable” under a Trump presidency, he said, “now people are thinking about it” – particularly China – putting the US in danger of being dethroned as global hegemon.

This is even more alarming given the current state of the US as a country, Trump said. “We are already reverting to third world status in many ways. You look at our airport, you look at our terminals, you look at our filthy roads and broken roads and everything else, we’re like a third-world country.

He blamed the Biden administration for the nation’s decline, suggesting his successor had triggered the current inflationary spiral with his moratorium on new drilling for oil. The US was just 18 months away from out-producing Russia and Saudi Arabia combined before Biden took over, Trump claimed, insisting, “We would have made so much money. We would have been paying off debt, we would have been doing things that nobody’s ever seen this country do.” 

No president has ever attempted to pay down the US’ national debt, which currently stands at $32.6 trillion by the Treasury’s own calculations – though some estimates suggest it may be several times that.

Trump himself added $6.7 trillion to that figure, putting him behind both Bushes and Barack Obama in terms of debt but ahead of Biden. However, the incumbent still has a year and a half to catch up, with theoretically bottomless spending programs like student loan forgiveness and the conflict in Ukraine. 

The apparent instability of the US economy – Washington’s credit rating was recently downgraded by Fitch Ratings from AAA to AA+ for only the second time in history – and the growing number of countries that find themselves on the wrong end of US sanctions have contributed to an unprecedented level of interest in ditching the dollar as reserve currency. 

These sanctions have inspired the BRICS nations to formulate an alternative to the US’ SWIFT international bank transfer system – a necessary foundation for any move away from the dollar.